Trade Balance & Treasury Budget
$8 billion of 10 year inflation protected notes sold in a Treasury auction. The 10 year TIPS were sold at a yield of 2.409 percent.
The good news: the Trade Balance gap narrowed from January's revised record deficit of $68.6 Billion.
The bad news: February's gap of $65.7 billion is the third largest on record.
The really bad news: the trade deficit will widen in March as China reported an $11 Billion surplus AND with oil imports at $65-$70 per barrel the deficit will continue to increase over the next several months.
The really really bad news:the U.S. trade deficit in the first quarter of 2006 is well on track to be the widest quarterly shortfall ever. Does it get any better?
The record 2005 $723.6 billion U.S. trade deficit was worth around 5.8% of GDP, while the record current account gap of $805 billion was worth around 6.4% of GDP.
In all this confusion, you have to ask yourself this question: Are these percentages of GDP sustainable over the long run? Do you feel lucky?
Bad News: Treasury Budget came in at an $85.47 billion federal budget deficit in March, its highest in history for the month of March. This topped economists forecasts for a $73 billion deficit.
The good news: Receipts were $164.56 billion, up from $148.76 billion in March a year ago. And although a record for March, it was less than the February 2006 monthly deficit that was a record for any single one month period at $119.20 billion.
Really Bad News: The deficit between government income and spending was up from a $71.21 billion deficit in March 2005. At this pace, this years deficit would be at 2.8 percent of gross domestic product compared with 2.6 percent last year.